Hokanson v. Zeigler, 20160359

• Decision Date: 31 July 2017
• Docket Number: No. 20160359,20160359
• Citation: 900 N.W.2d 48
• Parties: Curtis G. HOKANSON and Joan Hokanson, Plaintiffs and Appellants v. Corinne ZEIGLER, individually and as heir/ devisee to Charles Zeigler a/k/a Andrew Charles Zeigler, Bonnie Scharback, Terry Scharback, Bruce Bibler, Beverly Bibler, Delton R. Bibler, Lee Bibler, Curtis D. Bibler, Carol M. Bibler, Gerald Bibler, Alice Bibler, Trudy Mathae, Bruce Mathae, Kevin M. Bibler, Defendants and Appellees and all other persons unknown claiming any estate or interest in, or lien or encumbrance upon, the property described in the complaint, Defendants
• Court: North Dakota Supreme Court

900 N.W.2d 48

Curtis G. HOKANSON and Joan Hokanson, Plaintiffs and Appellants

v. Corinne ZEIGLER, individually and as heir/ devisee to Charles Zeigler a/k/a Andrew Charles Zeigler, Bonnie Scharback, Terry Scharback, Bruce Bibler, Beverly Bibler, Delton R. Bibler, Lee Bibler, Curtis D. Bibler, Carol M. Bibler, Gerald Bibler, Alice Bibler, Trudy Mathae, Bruce Mathae, Kevin M. Bibler, Defendants and Appelleesandall other persons unknown claiming any estate or interest in, or lien or encumbrance upon, the property described in the complaint, Defendants

No. 20160359

Supreme Court of North Dakota.

Filed July 31, 2017

Scott M. Knudsvig (argued) and Matthew H. Olson (on brief), Minot, ND 58702-1000, for plaintiffs and appellants.

Elizabeth A. Elsberry (argued) and Christopher E. Rausch (appeared), Bismarck, ND 58501, for defendants and appellees.

Kapsner, Justice.

[¶1] Curtis and Joan Hokanson appeal from a district court judgment dismissing their action to quiet title with prejudice after granting the Biblers' motion for summary judgment and denying the Hokansons' motion for summary judgment. We affirm the district court judgment.

I

[¶2] On March 4, 2014, Curtis and Joan Hokanson ("Hokansons") initiated a quiet title action naming Corrine Zeigler, Charles Zeigler, Bonnie Scharback, Terry Scharback, Bruce Bibler, Beverly Bibler, Delton R. Bibler, Lee Bibler, Curtis D. Bibler, Carol M. Bibler, Gerald Bibler, Alice Bibler, Trudy Mathae, Bruce Mathae, Howard L. Bibler, Continental Resources, Inc., and all other persons unknown ("Biblers") claiming any estate or interest in, or lien or encumbrance upon, the property described in the complaint as defendants.

[¶3] In 1957, the Board of University and School Lands of the State of North Dakota and Edson and June Bibler entered into an installment sale contract for the purchase of land located at Township 158 North, Range 99 West, Section 16: NE 1/4 in Williams County ("CONTRACT FOR SALE"). The CONTRACT FOR SALE provided Edson and June Bibler paid a down payment and were required to pay a specific amount per year until fulfilling the contract price. The CONTRACT FOR SALE indicated if the "said vendee, his heirs, assigns or other legal representatives, shall pay or cause to be paid" the purchase price and interest in the manner specified in the contract, the State would issue "a Patent for the said premises; said patent, however, shall reserve to the grantor all coal, oil, natural gas, uranium, gravel, clay and other minerals." In 1967, Edson and June Bibler conveyed the same property to Hans Hanson by warranty deed ("1967 Warranty Deed"). The 1967 Warranty Deed included a reservation that stated:

EXCEPTING AND RESERVING unto [Edson and June Bibler], their heirs and assigns, forever, all of the oil, gas, casinghead gas and gasoline, condensate, and all related hydrocarbons, sulphur, uranium, ferrous and non-ferrous metals and other minerals (except gravel and coal) on, in and under the above described real property, together with the right of ingress and egress for the purpose of prospecting, drilling, and mining for and producing them, and saving, storing, transporting and piping the same away.

The 1967 Warranty Deed also warranted there were no encumbrances on the land except the "indebtedness due the State of North Dakota ..., which [Hans Hanson] assumes and agrees to pay." In October 1971, Hans Hanson conveyed the same parcel of land to Curtis and Joan Hokanson using a warranty deed ("1971 Warranty Deed"). The warranty clause of the 1971 Warranty Deed contained boilerplate language indicating the land was conveyed free from all encumbrances. The following was also typed into the blank space provided in the warranty clause: "and except easements of record and subject to exceptions, reservations and conveyances of oil, gas and other minerals of record." In October 1971, the State of North Dakota issued a patent for the same parcel of land to Hans Hanson ("1971 Patent"). The 1971 Patent conveyed the surface and indicated the State had reserved "50% of all oil, natural gas and other minerals[.]"

[¶4] Prior to the initiation of the quiet title action by the Hokansons, the Biblers entered into oil and gas leases on July 9, 2013. The Biblers were named as the lessors, and the lessee in all the leases was Continental Resources. All leases were dated July 9, 2013. The Hokansons claimed they had title to an undivided 50% mineral interest under the property described as Township 158 North, Range 99 West, Section 16: NE 1/4 in Williams County. On March 14, 2014, the Biblers answered and counterclaimed. The Biblers argued they had title to the mineral interests under the subject property. On March 31, 2014, the Hokansons answered the counterclaim.

[¶5] In August 2015, both the Hokansons and the Biblers filed competing motions for summary judgment. In September 2015, both the Hokansons and the Biblers filed responses to the opposing motions. In their brief in support of their motion for summary judgment, the Hokansons argued they had a 50% mineral interest in the subject property. The Hokansons argued they received this interest because the subject property was conveyed to them from Hans Hanson with no reservations of mineral interest appearing in the 1971 Warranty Deed. The Hokansons argued the predecessor in interest to Hans Hanson was the State of North Dakota who conveyed to Hans Hanson the surface and 50% of the mineral interest by the 1971 Patent. The Hokansons argued the Biblers attempted to rely on two other recorded documents: a 1957 land installment contract between the State of North Dakota and Edson and June Bibler ("CONTRACT FOR SALE"); and the 1967 Warranty Deed wherein the Biblers purport to convey the subject property to Hans Hanson and reserve "all of the" minerals. The Hokansons noted the 1957 CONTRACT FOR SALE was not recorded until 1981. The Hokansons argued they were entitled to judgment as a matter of law and were entitled to quiet title to the 50% mineral interest in the subject property. The Hokansons argued the parties' intentions were clear from the 1971 Patent conveying the property from the State to Hans Hanson and the 1971 Warranty Deed conveying from Hans Hanson the same property to the Hokansons.

[¶6] The Biblers argued the 1971 Patent made no transfer of a mineral interest to the Hokansons' predecessor in interest, Hans Hanson. The Biblers noted they succeeded in interest to the 50% mineral interest by way of a personal representative deed of distribution in 1990. The Biblers asserted while the personal representative deed of distribution and associated documents did not "pertain to the heart of the issue before [the district court], they do confirm how the Bibler Defendants succeeded to the Subject Minerals previously held by Edson and June Bibler, as joint tenants." The Biblers argued the Hokansons had quoted the language of the 1971 Patent out of context by stating the Patent "includ[ed] 50% of all oil, natural gas and other minerals which may be found on or underlying such land." The Biblers argued the 1957 CONTRACT FOR SALE between the State and Edson and June Bibler, although claiming to reserve all of the minerals to the State, reserved only 50% under N.D.C.C. § 38-09-01. The Biblers argued the remaining 50% of the minerals were conveyed to them from the State by way of the 1957 CONTRACT FOR SALE. The Biblers argued the 1967 Warranty Deed conveyed 100% of the surface to Hans Hanson and reserved all of the mineral interests the Biblers owned, that being an undivided 50% of the mineral interest. The Biblers argued the 1971 Patent conveyed 100% of the surface and specifically reserved to the State 50% of the mineral interests.

[¶7] The district court held a hearing on the competing summary judgment motions on December 11, 2015. The district court entered an order granting the Biblers' motion for summary judgment on July 15, 2016. On August 12, 2016, the district court entered an amended order to correct the legal description. The district court entered judgment on August 24, 2016. The Hokansons filed a notice of appeal on October 24, 2016.

II

[¶8] The mineral interest disputed in this case is part of grant lands which may not be disposed of except under the authority of general laws providing for such disposition. The first document dealing with the transfer of this parcel of grant lands to a private party is the 1957 CONTRACT FOR SALE between the State and Edson and June Bibler. The 1957 CONTRACT FOR SALE provided for the sale of land owned by the North Dakota Board of University and School Lands.

[¶9] This Court previously described the framework of law under which the sale of such grant lands is governed:

When North Dakota was admitted to the Union in 1889, it received several million acres of land from the public domain for the support and maintenance of schools. Act of Feb. 22, 1889, 25 Stat. 676, § 10 (reprinted in 13 N.D.C.C. at 63, 68) [hereafter "Enabling Act"]; see Smith, State Lands: What Are We Doing? , 51 N.D.L.Rev. 477 (1974). This land, commonly known as school trust land, is held in trust by the State and carries numerous restrictions upon transfer. Section 11 of the Enabling Act provides, in part:

"That all lands granted by this act shall be disposed of only at public sale after advertising—tillable lands capable of producing agricultural crops for not less than $10 per acre and lands principally valuable for grazing purposes for not less than $5 per acre. Any of the said lands may be exchanged for other lands, public or private of equal value and as near as may be of equal area, but if any of the said lands are exchanged with the United States such exchange shall be limited to surveyed, nonmineral, unreserved public lands of the United States within the state.

....

"The state may also, upon such terms as it may prescribe, grant such easements or rights in any of the lands granted by this act, as may be acquired in privately owned lands through

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